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Newbie-Cost Estimating

Discussion in 'Introduce Yourself to the Community' started by MikeMc, Jun 22, 2010.

  1. MikeMc

    MikeMc Junior Member
    Messages: 3

    Good Afternoon Plowsiters,

    I am a property manager (PM) in Chicago and I have been asked to take over management/bidding/negotiations for a few large buildings' maintenance contracts here in Chicago. In the past, our facility manager (FM) has bid these contracts, which included snow; however, our FM left last month and I have been asked to bid on these contracts. Also, we are looking to separate our FM from our snow removal contract, as our head PM thinks that we can find savings from companies that specialize in snow removal, rather than operations of the building.

    Anyway, I have done many cost estimates in the past for other services, but I am finding it difficult to get a clear understanding of how this group of companies operates. I am sure the cost varies greatly depending on how much ground needs to be covered, how much snow there is and any other requirements for snow/ice removal. My problem comes in with the following:
    1) I do not know any labor costs for snow removal employees
    2) Is the cost based on an estimate of snow for the year? In the past, our contractors would take a flat fee based on a season and we would be required to purchase the "accessories" (salt, shovels, etc), but that type of contract seemed weird to me. Does anyone know of any good statistics on snow in the Chicagoland area? It would be good for me to estimate snowfall rather than "lump sum" our costs as we have a group of higher level investors that really likes numbers.
    3) How do you know how much equipment is being used? For instance, say we have 10 acres of land that needs to be plowed (I do not have the exact figures yet). How would we know how much equipment/people are needed to get the job done?

    We are awaiting off-site past estimates done by our prior FM, but I would like to get on this as quickly as possible. Any help would be much appreciated.

    Thank you,

    Mike aka Newbie
  2. cold_and_tired

    cold_and_tired PlowSite.com Addict
    Messages: 1,246

    So are you going to be using your own employees to do the work or are you hiring a snow removal contractor?

    I guess I'm not understanding why you would need to know labor costs for someone elses employees.

    If you are indeed looking for a snow removal contractor, you need to specify how they will bid the job. It sounds like your investors want to know exactly how much the snow removal will cost them. In that case, you need to specify that you want a seasonal contract with salt included.

    We dont do many seasonal contracts here in Colorado so I'm not 100% sure on the details of a seasonal contract.

    As far as equipment, have your bidders include a list of their owned and leased equipment along with how many personnel they plan on having during the snow removal season. It may also be wise that they specify which pieces of equipment they plan on using on the jobsite and how long they plan on taking to remove the snow.

    As always, the low bidder may not be the best for the job. Review their equipment lists, employee counts, years in business, references, etc before making your final decision.
  3. MikeMc

    MikeMc Junior Member
    Messages: 3


    Cold and Tired,

    We are trying to estimate what it "should" cost us to provide this service. Again, it may be a very difficult task, so I may be just tweaking past estimates (hopefully they were broken down properly in the old contracts) and using them for justification.

    Thank you for your help, Cold and Tired.

  4. Mick76

    Mick76 2000 Club Member
    from Maine
    Messages: 2,157

    Welcome to PS and the great bidding process we all go though every year!

    Costs will vary by area.....

    1) labor costs vary greatly.... A ligit co with comp and insured employees I would guestimate would charge out $20-50 per hour... might cost them $18-30 per hour

    2) Depends if its a seasonal or per storm contract... seasonals are an educated guess on what "should" happen....... seasonal or per event it all averages out... seasonals are easier to maint your costs... its a fixed payment every month no matter how much or little it snows....

    3) Depends on how much you have to clear and your time restraints given to do the job... If your serious about finding out more info you should join SIMA... tons of good professional reading there but it will cost you a few bucks to do so....

    As you will find out theres lots of planning that goes into these proposals.....
  5. basher

    basher PlowSite Fanatic
    from 19707
    Messages: 8,990

    DOT or the weather servie for snowfall amounts.

    You have to answer a lot of questions before you can even start to estimate price, What is your tolerance level, how many sg feet, what is the lot lay out. Shade or sun, what are the service requirements, Churches, daycare, medical, bars, 24 hour convenience stores and apartment complexes all have special challenges. Is there adequate snow storage or is it haul away. what is the drainage like, if you are considering a single contractor, travel times have to be factored in. Are skid steers, containment blades required, how much sidewalk,

    Consider joining SIMA
  6. TCLA

    TCLA 2000 Club Member
    Messages: 2,697

    What is the purpose of this estimate? What value can be found in this exercise unless the consideration is doing this work in house?

    The difficulty in dealing with experienced bean counters is educating them. There are many (and real) up front costs and preparations that will not be part of your considerations. The attempt to simplify the task of snow removal services is a classic rookie mistake.

    I'm surprised your prior contractors required you to provide them with de-icing material. I'm shocked to hear they also required you to provide them with shovels! This does not compute. These would normally be cost saving measures imposed by the client. Based on this alone it's safe to say your FM's have been choosing the wrong contractors in the past.

    Comparing snow removal vendors still leaves you with a contrast and choice of an apple or an orange......even with a formal RFP or RFQ. Comparing your perceived costs attempting to do this in house vs an experienced service provider would be a more odd analogy.

    Along with bashers input I'll ask what is your back up plan for equipment failures? Plow and truck breakdowns? No shows? Salt and bagged material, storage and handling? Do you have response plans created? Are you also prepared to assume full liabilities for slip and fall and/or car vs car accidents and claims on your properties?

    If you want to do what's best for your tenants and those who pay your bills I would advise you to concentrate on a building relationship with a professional to service your properties.....rather than trying to pull something off you have little experience with.
  7. swtiih

    swtiih PlowSite.com Addict
    Messages: 1,179

    Mike it is a little confusing what you are asking for. There are some good recommendations from the previous post, and you can also search previous posts on this site. I am not trying to be a wise guy but experience and service in the snow business varies from one company to the next just like any other business. Getting a good understanding of what your needs will be is where you should start
    Rates are different from one part of the country to the next. There are different ways to quote a job per plow or seasonal and even within these there may be limits.
  8. MikeMc

    MikeMc Junior Member
    Messages: 3

    Thank you all

    Thank you everyone for your information. I guess I have A LOT of work to do.

    To answer TCLA and swtiih's questions, the reason we are looking at these costs so closely is we had some issues with competition and no we are not looking to insource these services as additional insurance, management and capital expenditures would cause an uproar with our investors.

    Thank you for everyone's reply. I think my first step is to contact some local companies and hopefully get a better understanding of cost.

  9. basher

    basher PlowSite Fanatic
    from 19707
    Messages: 8,990

    First I'd talk to some of my peers and get an idea of who to call. Find out who has had what experances with whom. Could help make sure you get capable contractors who can give you a realistic price for good service.
  10. TCLA

    TCLA 2000 Club Member
    Messages: 2,697

    Yes, yes...

    BOMA would be a great place for you to invest a little time and energy.
  11. ADBsnowremoval

    ADBsnowremoval Member
    Messages: 43

    I am a chicago suburban snow and ice contractor. I think going through your old records would be a great place to start. In reality it does not matter what the snow company pays its employee's because the company cost's are the company cost's. The cost that Mick stated for billing out $30-$50 per hour per employee is WAY off for the Chicago Market. I think I am safe to say that most employee's get paid a very fair $$ amount, then you take into account that bigger lots take bigger equipment, which in turn takes bigger $$$$$ to pay for such equipment, insurance, taxes, company profit. The best way for you to get an approximation of cost's would be to call for estimates. But remember low bidder usually means just that...low quality of service. But on the flip side high bidder does not always mean the best quality of service. What you should take into account is the history of the company and how long they have been in business. Does your snow and ice removal company handle everything in house so that they are only a single phone call away, or do they farm out their jobs to someone with a truck that may not have the same quality beliefs as you do for your clients. If you have any properties in the North burbs of Chicago drop me a message or phone number back and lets talk.
  12. bhmjwp

    bhmjwp Senior Member
    from kcmo
    Messages: 309

    All sound advice. All I may add is to start your process early, July/Aug is none too soon. One benefit is that you will find the professionals in the industry are already planning for winter. Another point will be they will have the time to explain there bids-discuss service levels and customer expectations. This will allow you time to check their current customer references and see if expectations are being met. And finally-if cost considerations drive you selection-have a back up provider-it seems to never fail that some providers bid everything and then scramble to provide services. Just my 2 cents.